S. Poverty Law Ctr. v. Internal Revenue Serv.

589 F.Supp.3d 79

SOUTHERN POVERTY LAW CENTER et al., Plaintiffs,

v.INTERNAL REVENUE SERVICE, Defendant.

Civil Action No. 19-2501 (TJK)

United States District Court, District of Columbia.

Signed March 9, 2022

Arthur R. Bookout, Pro Hac Vice, Skadden, Arps, Slate, Meagher & Flom LLP, Wilmington, DE, Eben P. Colby, Pro Hac Vice, Skadden, Arps, Slate, Meagher & Flom LLP, Boston, MA, Donald P. Salzman, Skadden, Arps, Slate, Meagher & Flom LLP, Washington, DC, for Plaintiffs.

Kristina Marie Portner, Catriona M. Coppler, U.S. Department of Justice, Tax Division, Washington, DC, for Defendant.

MEMORANDUM OPINION

TIMOTHY J. KELLY, United States District Judge

The Southern Poverty Law Center and National Immigration Law Center submitted a request under the Freedom of Information Act, or FOIA, seeking records related to the Internal Revenue Service's criminal investigation of a taxpayer. After the IRS refused to produce the records, they sued. The IRS moved for summary judgment, arguing that the law prohibits it from disclosing the requested records. Plaintiffs cross-moved for summary judgment, arguing that they are entitled to the records under FOIA because they are already in the public domain and because disclosure is not otherwise prohibited by law. For the reasons explained below, the Court will grant the IRS's motion and deny Plaintiffs’, because the relevant statutes prohibit disclosure of the requested records under FOIA.

I. Background

In April 2018, a federal law enforcement task force executed a search warrant at a slaughterhouse in Tennessee as part of an IRS-led criminal investigation into the owner's possible violations of the tax code. Law enforcement officers seized evidence at the slaughterhouse and arrested employees who were allegedly not lawfully present in the United States. In February 2019, Plaintiffs filed a suit on behalf of employees of the slaughterhouse against various law enforcement officers involved in the execution of the search warrant ("Bivens suit").¹

A few months later, Plaintiffs submitted a FOIA request to the IRS. Plaintiffs requested 8 categories of documents:

(1) All records related to the planning and carrying out of the worksite operation conducted at Southeastern Provision LLC in Bean Station, Tennessee on April 5, 2018, including but not limited to:

a. Enforcement Action Review Form (EARF);

b. Risk Assessment Guide;

c. Search Warrant Checklist;

d. Search Warrant Plan;

(2) All communications between the IRS and any Tennessee state or local governmental agency or Tennessee state or local law enforcement agencies, including but not limited to the Tennessee Highway Patrol and the Morristown Police Department, related to the worksite enforcement operation conducted at Southeastern Provision LLC;

(3) All communications between the IRS and the Department of Homeland Security or its component agencies (including Immigration and Customs Enforcement, Homeland Security Investigations, and Customs and Border Protection) related to the worksite enforcement operation conducted at Southeastern Provision LLC;

(4) All communications, not concerning tax returns or tax return information, between the IRS and individuals associated with Southeastern Provision LLC, including managers, supervisors, employees and/ or agents;

(5) Copies of all photographs taken during the worksite enforcement operation conducted at Southeastern Provision LLC;

(6) Copies of all administrative and/or criminal warrants issued and served on an agent of Southeastern Provision LLC related to the worksite enforcement operation, including but not limited to, In re the search of: 1617 Helton Road, Bean Station, TN 37708 (E.D. Tenn. Apr 2, 2018);

(7) The identities of all IRS personnel involved in the planning of and/or physically present during the worksite enforcement operation at Southeastern Provision LLC, including, but not limited to:

a. Full name;

b. Rank or official title; and

c. Office location; and

(8) All FOIA Search Staffing Sheets related to the instant FOIA request.

ECF No. 1-1 at 2–3. The IRS responded that it would not process Plaintiffs’ request because it sought information barred by 26 U.S.C. § 6103(a) without the relevant taxpayer's authorization, and that it did not maintain "FOIA Search Staffing Sheets."² In August 2019, after the IRS denied Plaintiffs’ administrative appeal, Plaintiffs filed this suit seeking an order compelling disclosure of the requested records and an accompanying index explaining any withholdings. ECF No. 1 at 14.

A few months later, Plaintiffs served the IRS with a subpoena in the Bivens suit seeking the same documents.³ The IRS identified the following records responsive to the subpoena: 1,500 pages of grand jury material; 1,032 pages of non-grand jury material; 521 photographs; 5 video files; and 4 external hard drives containing video footage. Eventually, the IRS produced some of these responsive records, but it withheld others. ECF No. 25-2.

The IRS now moves for summary judgment, arguing that the requested records are exempt from disclosure under FOIA because 26 U.S.C. § 6103(a) prohibits their disclosure. ECF No. 24. Plaintiffs oppose and cross-move for summary judgment. They argue that the records do not fall under the purview of § 6103(a) and even if they did, the IRS must disclose them because they are already in the public domain through their production in the Bivens suit and through the plea in the related criminal case. ECF No. 25.

II. Legal Standard

A court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "Summary judgment is appropriately granted when, viewing the evidence in the light most favorable to the non-movants and drawing all reasonable inferences accordingly, no reasonable jury could reach a verdict in their favor." Lopez v. Council on Am.-Islamic Relations Action Network, Inc. , 826 F.3d 492, 496 (D.C. Cir. 2016). Although courts do not make credibility determinations, "[o]nly disputes over facts that might affect the outcome" of the suit can "preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

FOIA cases are "typically and appropriately" decided on motions for summary judgment. Laverpool v. Dep't of Hous. and Urb. Dev. , 315 F. Supp. 3d 388, 390 (D.D.C. 2018). Agencies generally bear the burden of proof in FOIA cases, and a court may rely on an agency's affidavits or declarations provided that they "describe ‘the documents and the justifications for nondisclosure with reasonably specific detail, demonstrate that the information withheld logically falls within the claimed exemption, and are not controverted by either contrary evidence in the record nor by evidence of agency bad faith.’ " Id. (quoting Mil. Audit Project v. Casey , 656 F.2d 724, 738 (D.C. Cir. 1981) ).

III. Analysis

"FOIA requires federal agencies to make records promptly available when a requester files a request for records which (i) reasonably describes such records and (ii) is made in accordance with published rules. See 5 U.S.C. § 552(a)(3)(A). But an agency need not produce records that fall within one of nine exemptions ... To withhold records, then, the agency must establish that an exemption applies and, for mixed requests, must still disclose all reasonably segregable, non-exempt portions of the requested record(s)." Elec. Privacy Info. Ctr. (EPIC) v. IRS , 910 F.3d 1232, 1236–37 (D.C. Cir. 2018) (cleaned up).

The IRS contends that it is entitled to summary judgment because the records at issue fall within Exemption 3, "which allows an agency to withhold records ‘specifically exempted from disclosure by statute’ if the statute meets certain criteria." EPIC , 910 F.3d at 1237 (quoting 5 U.S.C. § 552(b)(3) ). It cites 26 U.S.C. § 6103(a), which bars the disclosure of tax "return information" without the written consent of the taxpayer. The statute defines "return information" to include, among other things:

a taxpayer's identity, the nature, source, or amount of his income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies, overassess-ments, or tax payments, whether the taxpayer's return was, is being, or will be examined or subject to other investigation or processing, or any other data, received by, recorded by, prepared by, furnished to, or collected by the Secretary with respect to a return or with respect to the determination of the existence, or possible existence, of liability (or the amount thereof) of any person under this title for any tax, penalty, interest, fine, forfeiture, or other imposition, or offense.

26 U.S.C. § 6103(b)(2)(A). The D.C. Circuit has characterized "the relationship between § 6103(a) and FOIA as entirely harmonious" and that return information barred from disclosure under § 6103(a) is exempt from FOIA, absent a showing that one of the thirteen exceptions to § 6103(a) applies. EPIC , 910 F.3d at 1237 (internal quotation marks omitted). Thus, if the Court determines that the requested records fall under § 6103(a), Plaintiffs cannot obtain the requested records under FOIA absent a successful invocation of an exception to the disclosure bar.⁴

The IRS argues that the requested materials are return information because they are "other data" collected or prepared in connection with its investigation into potential tax crimes at the Tennessee slaughterhouse. The Court agrees. As always, the Court begins with the statute's text. See Eagle Pharms., Inc. v. Azar , 952 F.3d 323, 330 (D.C. Cir. 2020). Return information includes "any other data, received by, recorded by, prepared by, furnished to, or collected by the Secretary with respect to a return or with respect to the determination of the existence, or possible existence, of liability (or the amount thereof) of any person under this title...